Panto Budget Sails Through Water, Other Expenses

December 11, 1985|by JOE NIXON, The Morning Call

Mayor Sal Panto Jr.'s proposed 1986 budget continued to enjoy smooth sailing last night as Easton City Council made no changes in expenditures proposed in the areas of public services, water and sewers.

The proposed $9.25-million spending plan doesn't call for an increase in the real estate tax rate of 24.7 mills at 80 percent of assessed value, but does ask for a $20 increase in the annual garbage collection fee from $90 to $110. Residents age 62 and over and living alone in a separate housing unit will pay $77 under the proposed plan. City officials remain hopeful they can reduce the amount of the increase by year's end.

Last week, council reviewed the administration, police, fire, planning, state highway aid, Hugh Moore Park and federal revenue-sharing areas of the budget.

Council will review Panto's proposed $1.1-million capital budget at a special meeting Tuesday night. That budget proposes numerous projects including refurbishing three fire trucks, purchasing 17 vehicles (including new garbage and electrical trucks and 13 new subcompact and compact cars) and doing renovations to the municipal garage.

At its regular meeting last night, council approved the $2-million operating budget for the sewage treatment plant and voted for participation in a recovery program for the city's three pension plans, which together have an unfunded liability of close to $19 million.

The sewage plant budget was approved unanimously by council, with Councilman Thomas Goldsmith absent for the early portion of the meeting in which the vote on the sewer budget was taken. The city operates the plant on behalf of the Easton Area Joint Sewer Authority (EAJSA), of which it is the largest member. The budget approved last night is actually the lion's share of the EAJSA's $2.27-million 1986 operating budget. Not included in the budget City Council approved are things such as salaries for several EAJSA employees, consultants, engineers and legal advisers. The five EAJSA members contribute to the budget on a proportionate basis.

On the pension plan issue, City Business Administrator Robert Rush said Easton has elected to go with the "Level 3" option available to cities with "severly distressed" pension plans, something he said will allow the most supplemental help from the state. That supplemental funding should start in 1988, but Rush said the city does not know how much it will receive.

The city had to choose one of three recovery levels under the provisions of Act 205 of 1984, the state's pension reform law. The city will have to select a recovery option each year, Rush said, depending on the level of distress of the plans.

Under the level chosen by the city, Rush said, Easton must place the funds from the three plans into a single fund, have a separate pension plan for new employees and have an administrative plan in place to show how the plans will be funded.

The city has had a separate pension plan for all employees hired since 1979.

Rush said the city has elected a 15-year phase-in period which will allow it gradually to increase its allocations to the three pension plans to a prescribed level. The unfunded liability is expected to be funded over the next 40 years.

"That is the easiest way to phase into the funding of the plan," Rush said. "It's graduated up over 15 years until you get to the full funding requirements over the remaining years for the 40-year amortization. You actually ease into the full funding."

The city has also left the door open for increasing the municipal contribution over state limits, increasing the employee contribution if necessary and taking advantage of special taxing authority. "Based on the 1986 budget and projections for the future, we will probably not have to take advantage of those additional options for a couple of years and maybe we will never have to take advantage of them," Rush said. "But because of this election form, we are able to select those options as potential ways for the city to fund these plans over the 40-year period."

In October, the city announced the pension plan for non-uniformed workers had an unfunded liability of $8.3 million, with police and fire having liabilities of $4.8 million and $5.8 million, respectively.